Jack Taylors

For my informational interview, I talked to Jack Taylors from Toyota of Bowie. I called him on a monday and he was happy to discuss the automotive industry. He gave me a lot of information and lengthy answers but I chose these three bullets as my take aways: 

• One really interesting trend is the number of vehicles originally sold in Canada that exist in the U.S. market. More than 2.5 million “Canadian Only” vehicles now reside in the U.S.; and not just in states bordering Canada, but all across the country. 

• While new vehicles are the focus for parts manufacturers and retailers, there’s still a strong market for older cars. There are more than 1.1 million registered vehicles from model years 1967 to 1973 on the road in the U.S. today. 

• The “green” trend is increasing it’s impact on the automotive industry. Though hybrid vehicles and alternative fueled vehicles are still a small part of the automotive industry, this segment is seeing some growth and will no doubt continue to carve out a firm niche in the market. 

I learned valuable lessons and information from conducting this interview and I was extremely surprised how people are great resources.  

Luxury Brand

In an attempt to compete in the auto industry sales, Cadillac has decided to create a new model that is focused primarily on the Urban Luxury Concept (ULC). Ordinarily, luxury buyers would focus on the size of the vehicle before making a purchase, but now the bigger cars can be "replaced by something more compact but equally luxurious." Cadillac has created a diminutive sized vehicle that offers the same luxurious aspects as some of their other models. This ULC model has "become very popular in places such as Europe and Japan." Although it doesn't look like the typical Cadillac, it shares similar features and "shares the [same] comfortable and high tech elements." Along with many great features, the ULC contains an engine that "uses electric assists to boost both performance and fuel-economy." This new model will not be "shown in the Cadillac showcase room anytime soon," until they know that it will make an impact on their buyers.

Cadillac is not the only automaker making strides to create smaller hyrbid vehicles. Companies such as BMW, Audi, Mercedes-Benz, and Lexus have all been taking steps to launch hybrid vehicles. They know that the more compact vehicles are being bought more frequently due to conservation of fuel, and don not wish to be left behind in the production process. I feel as though this is a good idea for all automakers. In order to compete you must give the buyers what they want. By adding the same if not better luxury parts, the companies will have a better chance of selling their product. As for Cadillac, even though it is mostly known for its' large and comfortable automobiles, it should consider showcasing this new product while emphasizing its' luxurious aspects. It may turn out to be a bigger sale than the company imagined.

http://www.thedetroitbureau.com/2010/11/First-look-cadillac-urban-luxury-concept/
By: Paul A. Eisenstein

GM IPO Looks Good

General Motors has announced that it will increase its initial public offering of common stock from $32 to $33 per share. This is a result of increased demand for GM stock because it has had significant profits after the 2009 bankruptcy bailout. The government’s bailout money, which has caused it to own approximately 61% of GM, will now be lessened after this generates $8.6 billion of revenue. After the IPO, the government will own only 35% of GM.

At the beginning of the month, GM claimed that it would issue 365 million shares of IPO stock. However, the strong demand from investors has increased the amount of shares offered by another 54.8 million according to the banks. The U.S. government wants to add another 84 million shares to this. Steven Rattner, the Obama administration’s leader for the bailout of the U.S. auto industry said, “Investors who have long shunned automotive stocks are giving the sector a fresh look as GM, Ford Motor Co., and Chrysler LLC deliver impressive financial results” (The Wall Street Journal). This has led SAIC Motor Corp., China’s largest auto maker, to buy approximately $500 million of GM stock.

During a continuing economic crisis, the Big Three have performed very well. All of their financial reports have amounted to astonishing numbers. This has increased their rankings as top investment choices. The Big Three have sought new production methods, have new management, and are producing innovative cars to remain competitive. These practices will continue because of GM’s obligation to pay back the funds that the government bailed them out with, and to assure that they remain in good stead. As we have seen, these automakers employ many Americans and have a huge effect on the economy.

Source: http://online.wsj.com/article/SB10001424052748703326204575616633069634188.html?mod=WSJ_auto_IndustryCollection

Social Media Stars as Ads

Auto companies used to have celebrities drive their cars around to raise publicity. Cash strapped car companies now turn to young people who have strong online presence. Toyota recently hired youngsters who have many followers on Twitter to advertise its Lexus brand. The online ads show actress Whitney Cummings interviewing those who don’t fit the typical celebrity label. The roster includes the Web editor of the Onion, an expert on social-media, and a disc jockey. From a marketing perspective, ads that show social-media stars are more effective than ads showing celebrities to get the attention of younger drivers. They conclude this because of the tendency for people to trust others who are like them. The stars quickly tweet, comment, and post their experiences with the cars online. Ford will select a hundred people with many online followers to test drive its 2012 Focus as part of its advertising campaign. BMW is also planning a similar promotion for its electric vehicle called ActiveE, which comes out in 2011.

This cheaper alternative to hiring celebrities is a hit. Ford proclaimed the strategy’s success when such videos and tweets essentially became viral hits; the YouTube videos got over seven million views, and Ford’s Fiesta was mentioned on Twitter four million times. Ford said 130,000 customers went to their website as a result and a massive 83% weren’t Ford owners. However, auto companies aren’t guaranteed that the social media stars will rate their cars positively. Guidelines set force these stars to mention if they received compensation for the review.

I think auto companies are on the ball with their approach to targeting younger drivers. I would say younger people are much more likely to pay attention to a subtle ad online than watching T.V. When you see that the user you’re subscribed to on YouTube or the person you’re following on Twitter likes something, you’re more likely to check it out. This trend is likely to continue as people are increasingly spending time on social networks. While the car companies are taking risks when they let social media stars say what they want about the cars, the danger of the marketing tactic to backfire is small. The companies know what’s on the line, so they would only let them test drive cars that are tested to be of the highest quality.

http://online.wsj.com/article/SB10001424052748704658204575610593926104822.html?mod=WSJ_auto_IndustryCollection

Don't Overlook Lexus

When it comes to advances in gas reduction for the automotive industry, the expensive brands are often overlooked. People often focus on vehicles such as the Nissan LEAF, the Toyota Hybrid Prius, the Hybrid Ford Escape, and more, while brands such as Mercedes, Porshe, and Lexus fall under the radar. Sometimes the market thinks that their high prices hinder them from truly reaching their market potential in things such as the green movement, but I disagree. They have invented new technology that will continue helping the economy progress in the green movement, and soon enough they will not be overlooked.

Most recently, Lexus came up with something called the "Artificial Intelligence Shift Control System" which can be found in their RX Hybrid 11. It is an advanced mechanism placed in the front of the car which detects when the car drives uphill or downhill and it signals when the energy shouldn't be used (like when going downhill) so it shuts off the engine.

Another indicator that Lexus is moving in the right direction is that they already meet Obama's fuel efficiency standards, which require all vehicles to get 35 mpg by 2016. Also, Lexus is made by Toyota, and they already have two electric cares due to hit the market in 2012. Therefore, improvements and innovations for Lexus are not distant.

Due to the fact that Lexus has innovations that other companies have yet to implement, that they already meet fuel efficiency standards which should be enforced by 2016, and that their makers are definitely headed in the right direction show me that they will not be overlooked in this green movement for long. Once people realize how innovative they are, they will be flooding their dealership.


Angelilli/Lexus, Brandi. "Lexus vs. the Future." Telephone interview. 10 Nov. 2010.

New leaders, but don't give up on the others.

 General motors Co. overtook Toyota Motors Co. as the more profitable automaker this year, while Ford Motors Co. held its lead as the world's top-earning manufacturer amid rising global sales for the industry. GM reported third-quarter net income of $2.16 billion today, bringing the automaker's earnings this year to $4.77 billion. That tops the $4.46 billion profit by Toyota in the nine months ended Sept. 30, according to data compiled by Bloomberg. Those numbers are understandable because after all of controversy surrounding Toyota, no consumer who wants to buy and reliable, safe car will want to purchase a Toyota.

    However Toyota is not out of luck. There is still hope for them to rise to the top of the automotive industry again. “I'm a believer in the auto cycle,” said Alan Tarver, a fund manager Frost Investment Advisors in San Antonio, Texas, which holds shares in Toyota and Volkswagen. You've been through “the bottom, and you're coming out of it. Sales units are stronger, and everyone's nudging up their production assumptions.” So for those who have stocks in Toyota should hold on to them and ride out the industry cycle. 
http://www.autonews.com/article/201010/OEM/101119981/1401

Unrealistic Car Expectations?

CEO of Daimler Company, the makers of Mercedes Benz, Smart Cars, Fuso and more, is claiming that the auto industry won't be able to keep up with the strict regulations being placed on fuel efficiency. He claims that the over-optimistic expectations are just causing car makers to give up because they can't keep up with the rules so they don't even feel the need to try anymore. The CEO, Mr. Zetsche, claims that "In 10 years' time, the overall market share of electric cars is likely to be still in the single-digit percentage range."

Mr. Zetsche did however add that in 10 years the fuel efficiency around the world will be at such a high standard that the competitiveness that is beginning to be spurred now is necessary, just a little unrealistic. Regardless, Zetsche says that Daimler is "full on track" to have a completely electric car on the market in 2012, because of their 5 diget production rate. They have already presented an electric version of their A-Class in Paris this past October.

Despite all of the problems that have become relevant in the past year about electric cars, such as battery life, old gas storage, charging stations and more, I still feel that the auto industry as a whole needs to continue working hard towards perfecting all of their problems. In the near future, the whole auto industry will be electric and if America doesn't start to comply with the Obama regulations then we will fall behind and lose money. If we attempt to reach the standards and fall a little short, as long as the companies are close the auto industry as a whole will be fine and on the right track towards becoming the strong industry that it needs to be.


http://online.wsj.com/article/SB10001424052748703848204575608230602308648.html?mod=WSJ_auto_IndustryCollection

BMW Accelerates

By 2013, BMW will have created its first hybrid supercar, in an effort to create more fuel efficient vehicles. This model will be able to accelerate to "100 kilometers per hour in 4.8 seconds while emitting 99 grams of carbon dioxide per kilometer." Strategies for boosting the car sales are already in effect. It should attract many consumers because the new sports car enables doors that open upwards, and is "powered by a three-cylinder diesel engine and two electric motors." BMW is looking to achieve high market presence with this vehicle. It is striving to become one of the leaders in hybrid and environmental technology; however, it will take a while before it can earn this title.

I feel that this is a smart choice on BMW's part. This manufacturer is well-known and well-used throughout the world; therefore, creating a hybrid vehicle will allow some of its' faithful customers to join in on this environmental conservation process. BMW will be selling a vehicle that not only will be more fuel efficient, but the style of the car will attract many customers, especially the younger crowd. It should not have any problems with trying to sell this new model, as long as it sells at a considerable price and, through marketing and advertisement strategies, promotes safety and reliability to its' customers.

http://www.autonews.com/apps/pbcs.dll/article?AID=/20101105/ANE/101109878/1193

GM is Rolling in the Dough

General Motors has said that it earned $2 billion in the third quarter of this year. This is the third consecutive quarterly profit GM has made due to its pickup trucks and consumers paying higher prices for its vehicles. At this time last year, the company had a $1.2 billion loss immediately after being saved out of bankruptcy. GM has reported earnings per share of $1.20 compared with a loss of 73 cents a share in July 2009. This is due to the company cutting costs.

The automaker reported that it made $1.4 billion on its operations. GM has said that this year will be the first annual profit since 2004. The company has seen U.S. sales improve and fast growth in China and other markets as well. On average, the auto maker earned an average of $3,005 on each vehicles it built. This compares to Ford earning an average of $2,710 on each vehicle and Chrysler only making $593 per vehicle.

GM has seen consumer trends change in the past year. According to officials, “The trend toward buyers favoring trucks could be a troubling sign for auto makers as GM and its rivals prepare to launch a string of small cars-largely in response to stricter U.S. fuel-economy standards,” said Rebecca Lindland. The recent profits have helped GM pay back some of its bailout money and also pay for pension plans.

With new management and a better runned company, I am confident that GM will continue to do well. The company has done a lot to change itself, and it is using the bailout money wisely. It is trying to reestablish itself in the marketplace and be a major competitor overseas.

Source: http://online.wsj.com/article/SB10001424052748703805004575606200306436706.html?KEYWORDS=auto

Foreign investment, everybody's doing it

The city government of Beijing will soon become the largest private employer in Saginaw, Michigan. In a few weeks a unit of GM there will have Chinese owners. The steering equipment producer was known as Saginaw Steering Gear, and is now called Nexteer. 8,300 people work for Nexteer around the world. The Chinese investors out-bid Korean and U.S private-equity contenders. The Beijing owners are known as Pacific Century Motors. This is the first time in history where China’s investors bought such a large U.S. industrial operation. The $450 million deal includes 22 factories, 6 engineering factories, and 14 customer-support centers, located around the world. This action tests people’s attitudes towards foreign investment. A major incentive for GM to make the deal was for Nexteer to dive into the booming Chinese auto market. Some workers see this deal as a life saver in the short-term, but aren’t sure if it’s good for them in the long-run. An unknown is whether the Chinese owners acquiring over 1,000 patents will benefit or hurt the workers. Chinese investment increases the leverage the U.S. has over China to let more U.S. firms in. Alan Wolff, an attorney for Dewey and LeBoeuf, says foreign investment built the U.S. for years. He points out that the investment bolsters U.S. manufacturing, which is better for the U.S. than Chinese manufacturing.

I think this deal shows the beginning of the increasing mix of investment between the U.S. and the world. These types of investments happened before with Japanese investors, and they created manufacturing jobs for the U.S. The interest in the unit by Korean investors also show that we will most likely see Korean owned units in the U.S. soon too. I think the increased investment in the U.S. by foreign investors improves political stability for the U.S. If countries are economically interdependent with one another, they will be much less likely to be aggressive or go to war. I understand that many workers are scared of working for foreign owners. However, the U.S. has done these investments to many countries around the world. The nations that got the investments at the very least gained jobs, and many countries have grown tremendously because of the foreign investment.

http://online.wsj.com/article/SB10001424052748703957804575602943255219552.html?mod=WSJ_auto_IndustryCollection#articleTabs%3Darticle

Best Deals of the Year

Toyota brand boss Bob Carter said  the automaker will launch special leasing and purchase deals within weeks to boost flagging volume. Toyota Motor Sales U.S.A. reported October U.S. sales fell 4 percent from a year earlier. Still reeling from a series of safety recalls this year, Toyota was the only major automaker to post a sales decline last month as the overall industry advanced 13 percent. 

Toyota's U.S. sales are up 1 percent year-to-date, compared to an overall market that is up 11 percent. Carter told journalists the new Toyota Care campaign that includes routine maintenance as standard for all vehicles has improved showroom traffic.  He pledged to follow that with a series of financing and leasing incentives later this month during Toyota's annual Toyotathon sales event. “You will see an enhancement to marketing and incentives but [they] will remain consistent in the APR and lease arenas,” he said. “They will be the best deals of the year -- leasing and APR deals are moving the market.”

Carter added that some light truck incentives will be cash because that's what is typical in those segments, but most will remain leasing and finance deals to protect the brand. Toyota's lingering image problems from recalls and the aggressive discounts the automaker used earlier in the year may cut into sales in the fourth quarter, analysts said. “The recalls are still a black cloud around Toyota,” said analyst Jesse Toprak of TrueCar.com. “Other automakers are making better cars than a few years ago, so this damage to customer loyalty could be very costly for Toyota. There's a chance these losses are permanent.”


I think these incentives and deals are necessary for Carter and Toyota to take action in order to boost consumer sales and trust.  Especially with Toyota's imagine problem and recalls, consumers are now losing their customer loyalty and Toyota's sales are decreasing. Once the " best deals of the year" take place, it will be interesting to see what happens to Totyota's sales and their corporation's image. 

http://www.autonews.coms/pbcs.dll/article?AID=/20101103/RETAIL01/189009485/1448#ixzz14JlSM63N

Strap Up

The Supreme Court has been suggesting whether or not there should be regulations that "require car makers to install shoulder-and-lap seat belts in all rear seats because of cost concerns." There have been individuals who feel the need to sue car makers that install lap-only belts; however, this would affect the National Highway Traffic Safety Administration costs. Recently, there has been a Supreme Court ruling that "barred a lawsuit against American Honda Motor Co. for injuries sustained in a crash involving a 1987 Honda Accord that wasn't equipped with air bags." The ruling was prohibited, but the regulators "intended to promote a variety of passenger restraints in cars." On the seat-belt issue, regulators are encouraging the installation of shoulder-and-lap belts. Still, it is up to the manufacturers to design what is most appropriate for their vehicles.

I feel as though there should be a law that prohibits car manufacturers to install shoulder-and-lap belts in all vehicles. With there being so many automobile accidents, there needs to be a higher concern for automobile safety. This doesn't mean that it will always prevent death or injuries, however it will create a better chance for those in the vehicle. I don't think that it should be up to the auto manufacturers because this is something that concerns the lives of the individuals who purchase the automobiles.


http://online.wsj.com/article/SB10001424052748703506904575592562770384770.html?mod=WSJ_auto_IndustryCollection

When people buy a car they consider many different options; some focus on looks, some on speed, others on safety. But everyone cares about reliability. American and European brand name cars are now getting a wake up call because Asia continues to have some of the most reliable cars including Toyota and Honda Motor Co. Predictions say that their 2011 models will only strengthen their reputation.
But Ford and GMC are not just sitting back and watching Asian cars surpass them. They have been working hard to improve their reputations by sending the unreliable cars to the scrap yard and by creating new models such as GMC's 2011 Chevrolet Equinox crossover wagon and Buick LaCrosse sedan. Also, Ford's Fusion sedan is now top-ranked when it comes to family cars.
Reliability is such an important factor because the more people can trust the company's car, the more they are willing to pay for it. Just last quarter Ford earned 1.7 billion. But their work is not done yet, they are still only ranked 10th out of 27 in reliability.
David Champion, senior director of Consumer Reports auto-test operations says, "It doesn't take very long to lose a good reputation, but it takes five or 10 years to gain one." Ford and GMC are now on the right track.

I feel that in general, Ford and GMC have nothing to worry about because soon enough they will find themselves in the top rankings. They have been slowly climbing up by building trust with their consumers, and eventually they will get to where they need to be. Toyota on the other hand, may need to be worried. Last year they experienced many recalls and probably lost a lot of consumer trust. Overall, I feel that American brands will soon take the lead, but in the future the reliability list will continue to be one that fluctuates constantly.

BMW Sells Well in China

Affluent Chinese consumers have been purchasing BMW vehicles in the past year. BMW has reported that their net profit grew by $1.22 billion since last year. The auto maker increased the profit margin on its cars to 7% from being 5% in past years.

These profits have been a result of streamlined cost structures as a result of the market decreasing last year. The company has a target sales of more than 1.4 million cars this year. Sales are up by 13% compared with the same period last year. BMW has claimed, “It expects sales momentum to continue in the fourth quarter with robust growth in the double-digit percentage range” (The New York Times). This confirms how BMW expects growth to continue at a steady rate until the end of the year.

BMW has seen great improvements in the sales of their vehicles in China due to their release of the 5 Series Touring and the Mini Countryman. Soon, the new BMW X3 will be on sale, which has shown positive feedback as a result of many orders for the vehicle in dealerships. I expect BMW to perform well in the future, but this is variable because of the economy. BMW will have to focus on the growing Chinese market as the U.S. market still recovers from this recession.

Source:

http://online.wsj.com/article/SB10001424052748704462704575591660311662990.html?KEYWORDS=auto+industry

Finally some good news...Auto sales improving

A top sales analyst at Ford expects that October new-vehicle sales grew 12% for the auto industry. The annual selling rate is also expected to rise to its highest level in more than a year. 950,000 new cars and light trucks were expected to be sold this October compared with 838,052 the same time last year. This would mean the annualized sales pace for October grew to 12 million; the last time this happened was when the cash-for-clunkers program was in effect. Sales for Hyundai increased 38% from last October to 42,656. BMW sales rose 12.4% to 23,222. Volkswagen reported a sales increase of 18% to 20,084. Subaru sales also went up 25% to 22,720 cars. It’s still too early to know if this signals a needed recovery for the auto industry. While consumer spending has recently gone up, consumer confidence remains weak. This upward trend must be supported by higher consumer confidence for it to continue.

I think this is great news for the auto industry. If I’m worried about my finances and keeping my job, buying a brand new car would be out of the question. The increase in sales indicates that more people are feeling financially secure. While the economy is still in terrible shape, these numbers show that it’s getting better. Because sales have gone up for many companies, it is likely that the market is improving rather than a single company suddenly succeeding. Hopefully the auto industry can pick up some speed after seeing some positive numbers.

http://online.wsj.com/article/SB10001424052748704462704575590662948503410.html?mod=WSJ_auto_IndustryCollection

Big money for a little car

              Imagine spending 190 million dollars for a small sedan? That is what General Motors Co. plans to spend $190 million in a Michigan plant to build a small sedan for Cadillac. General Motors CEO Dan Akerson is supposed to reveal the news tomorrow at the Lansing Grand River assembly plant. The Lansing State Journal and The Detroit News reported the news today. GM officials and Lansing Mayor Virg Bernero,  the Democratic candidate for Michigan governor, announced the news together. The Cadillac ATS will be marketed below the CTS. CTS will no longer be the smallest Cadillac model. The ATS, a compact luxury coupe, is expected to go on sale as early as the 2012 model year. Speculators say Cadillac may sell coupe and wagon versions of the ATS as well. GM already builds the Cadillac STS sedan and CTS sedan, coupe and wagon at the Lansing factory. The Lansing City Council voted to offer GM about $9.8 million in tax breaks to persuade the company to build a new model at the plant, the State Journal reported. The paper said city officials expect the investment and addition of the ATS sedan to create about 600 jobs at the plant.
    It is a definite perk to investing that much money into a new model of a sadan that the plant provides 600 jobs. If it weren't for the people that are now able to support themselves from this plant, I would think it is a little extreme to waste that much money, time and energy on a model that, personally, doesn't have that much consumer appeal. Only time will tell if GM made the smart investment. 

http://www.autonews.com/apps/pbcs.dll/search?Category=SEARCH&SearchProfile=1250&exclcat=COPY;COPY01;COPY02;VIDEO;HOLD&noblankcheck=1&ProfileName=--%20Chrysler%20brand 

Consumer Reports Says Yay to Some, but Nay to Others

Surprisingly, Ford had the highest-ranked models in the family car segment with their Ford Fusion Hybrid and Ford Fusion V6 models. This vehicle beat the Toyota Camry and Honda Accord, which do not usually lose in this segment. However, Toyota led in five other segments, but scored only an average rating on their popular Prius model. This was a decline from last year. Toyota’s major recall on the brakes of the Prius caused it to score significantly lower than usual.

As the Japanese and most of the American automakers strive to the top of the charts, the European luxury brands were in a different category. BMW, Mercedes-Benz, and Audi performed very poorly. In particular, BMW had five of 11 models ranked below average.

The overall comparison ranked Scion as the best brand and Chrysler as the lowest-ranked brand. Unfortunately, Chrysler has not undated its model line to meet consumer demands and it has not improved like Ford and GM. I expect Chrysler to create even more of a financial deficit than it already has in the future and I am sure that it will run out of business within the next ten to fifteen years. Ford and GM have shown that they are taking the initiative to improve their image and their hard work is paying off. The improving ratings of these two brands has helped shift consumers eyes off of the popular German brands and redirect them to American automakers.

Source: http://online.wsj.com/article/SB10001424052702303341904575576454238670026.html?KEYWORDS=auto+industry

Fuel Efficiency Standards for Trucks

Fuel economy targets have been set for small vehicles, which inclues anything under 8,500 lbs.) for many decades. But now for the first time ever the Obama administration is attempting to set fuel-economy standards on trucks, buses and tractors. The goal they want the Industry to achieve is for all trucks to be 20% more fuel efficient by 2018.

This is such an important issue to address because although trucks over 8,500 lbs. only make up 3% of the vehicle fleet, they consume over 15% of the fuel. For example, a garbage truck takes 5 miles per gallon, while traveling on average 20,000 miles per year...thats means they consume over 3,600 gallons a year! With the implementations of these electric and hydraulic hybrids they are expected to save 1,100gallons of fuel within the first year.

Although it seems that there are only positive consequences to this change, that is not the case. Because of the new technological advances that will be needed to improve the fuel-economy, the expected cost of the improvements come out to 7.7 billion.
in order to bounce-back from this outstanding debt, they will raise the prices significantly to make sure the buyers recover the cost within the first year. The American Truck Dealers Association cautions that this plan will deter many small market buyers from purchasing trucks. But others argue that on average, a truck driver will save 74,000 over the span of a trucks life. These enormous savings should bring back and buyers that may have been in doubt.

At first a higher price tag on trucks, buses, and other heavy vehicles may make buyers question their purchase, but in the end I feel that they will realize that will save money. Before making a purchase they will speak to the sellers and they will eventually understand that they will save the money they would've normally put towards gasoline and spend half of it on the vehicle itself, and just pocket the rest. This idea to up the fuel efficiency standards is a fantastic plan to keep our overall fuel usage down.


http://online.wsj.com/article/SB10001424052702303467004575574251198447096.html?KEYWORDS=all+electric

Problem, Officer?

A study was conducted to see which car models received the most traffic tickets. Quality Planning, a company that analyzes driving statistics for insurance companies, looked through data on 2 million cars. High-performance luxury cars got a lot of tickets. This is probably because these drivers want to test out what these cars can do. Colorful SUVs and compact sporty cars with young drivers also got a lot of tickets. Overall an average of 1 moving violation was found for every 500,000 miles driven. The most ticketed model was the Mercedes SL, which received 4 times more tickets than the average model. Others on the top 10 most ticketed models list include the CLS 63 AMG sedan, the Scion tC, the Acura Integra, and the Toyota Camry Solora convertible. The least ticketed models include bland SUVs, minivans, and average looking cars. While Quality Planning doesn’t have an official conclusion, they suggested that drivers who want to drive fast often buy high-performance cars. This leads to these cars being on the receiving end of speeding tickets.

Some interesting finds in the article that were conducted in separate researches include:
• Out of town drivers who are caught speeding are more likely to pay and pay a higher fee for speeding than drivers from that town.
• Drivers caught speeding in cities with budget deficits were more likely to be handed pricier tickets.
• Young women received 33% less tickets than men, but women over 75 years old got tickets at the same rate as men.

I think it makes sense that luxury cars get more tickets than average cars. I agree that drivers who are riskier and more aggressive tend to drive high-performance cars. Another good reason these flashy cars get more tickets could be that these cars simply get more attention than the average car. A police officer sitting in his car with his radar gun sees cars speeding all the time. A car that triggers his attention is more likely to make him give chase. On the finding that young women get a third less tickets than men, I wonder if this meant women are less likely to speed or women are less likely to get a ticket when they are stopped. If it’s the latter, it would be interesting that police officers have such a bias.

http://online.wsj.com/article/SB10001424052702304510704575562313011143510.html?mod=WSJ_auto_TopRightCarousel_1

Environmental Limits

As we know, many auto makers are trying to produce better fuel efficient vehicles. This is why we have been noticing more hybrid gas-electric vehicles, as well as all-electric vehicles. Auto manufacturers have found that all-electric vehicles help cut greenhouse gases and smog, which is very beneficial to the environment. However, when it comes to hybrid gas-electric vehicles, there is not much of a difference between the two products. It's obvious that electric vehicles have lured in its customers because of "its ability to curb use of fossil fuels, which spew out pollutants including greenhouse gases." Studies have found that "charging an electric car over a 10 year span could be as much as 80% lower than driving a gasoline powered car." With this also comes and economic issue that troubles many individuals, and that is whether or not the battery packs used by plug-in hybrids will be recycled. Right now, there aren't many recycling companies that will take in such large batteries and because of this, GM Co. and Nissan Motor Co. are trying to find ways to give batteries a second life.

I feel as though no matter what the automakers try to come up with to build a more fuel efficient economy, there will always be an opportunity cost. There will be some benefits to their ideas as well as some disadvantages. Some people aren't always going to agree with the products being used because of how harmful it could be to society, such as the batteries not being recycled, but looking long-term, it's evident that using electrical vehicles are still better for out environment. The most important thing is to find ways to reduce greenhouse gases, and as long as that is taking place, there shouldn't be much disagreement with how the auto industry is working.

http://online.wsj.com/article/